Business
Trading Update - In Line with Expectations
Trading Update - In Line with Expectations.
About this update from Eurocell Plc
[{"type":"text","content":"\n\n25 July 2023\nEUROCELL PLC\n(\"Eurocell\" or the \"Group\")\n \nTrading Update - In Line with Expectations\n \nEurocell plc, the market leading, vertically integrated UK manufacturer, recycler and distributor of innovative window, door and roofline PVC products, provides the following update for the six months ended 30 June 2023.\n \nFirst Half Trading Performance\nAgainst a challenging backdrop and an exceptionally strong 2022 comparative period, we have delivered some resilience in the Group's sales performance for the first half.\n \nReported Group sales for the six months to 30 June 2023 were £184 million, down 2% on H1 2022, with volume 6% lower. Comparisons by division were as follows:\n \n\n\n\nSales to 30 June 2023\n\n\nvs 2022\n\n\n\n\nTotal Group\n\n\n-2%\n\n\n\n\nProfiles Division\n\n\n-1%\n\n\n\n\nBuilding Plastics Division\n\n\n-3%\n\n\n\n \nProfiles - reduced repair, maintenance and improvement (RMI) activity and a weaker new build market resulted in lower sales volumes, partially offset by the benefit of recent market share gains. We have continued to acquire new fabricator accounts, and our pipeline of potential new fabricator customers remains positive, further supported by a net reduction in UK capacity following the recent announcement by UK Windows & Doors Group that it intends to shut its Duraflex extrusion business in September.\n \nBuilding Plastics - RMI volumes in the branch network remain steady but subdued, with increased competition for limited demand leading to some pressure on margins.\n \nWe have experienced persistent input cost inflation, particularly for labour and electricity (where we operate a rolling 12-month forward hedging policy), but we continue to offset this with selling price increases.\n \nPVC resin prices fell back slightly, and whilst we anticipate some easing of input cost pricing in H2, recycling feedstock prices remain significantly higher than the comparative period in 2022.\n \nOutlook and Seasonality\nThe latest Construction Product Association (CPA) forecasts published earlier this week predict greater declines for 2023 in the RMI market of 11% and new build market of 19% (previously 9% and 17% respectively), before both markets begin to recover in 2024.\n \nAs demand has softened, we have acted to lower our cost...